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Investing.com - JPMorgan has reiterated an Overweight rating on Coterra Energy (NYSE:CTRA) with a price target of $33.00, despite recent operational challenges facing the company. According to InvestingPro data, the stock appears undervalued at its current price of $25.24, with a P/E ratio of 14.6x and a market capitalization of $19.1 billion.
The energy firm has faced significant pressure lately following an uncharacteristic guidance cut related to operational difficulties with the Harkey Shale interval, according to JPMorgan’s analysis.
Management’s decision to maintain nine rigs in the Delaware Basin has added to investor concerns, as this strategy could push capital expenditures toward the upper end of Coterra’s recently lowered guidance range.
The company had previously reduced its capital expenditure guidance to between $2.0 billion and $2.3 billion, reflecting adjustments to its operational strategy amid these challenges.
JPMorgan characterized Coterra Energy as having been "a bit of a punching bag recently" due to these developments, yet maintained its positive long-term outlook on the stock as reflected in the unchanged Overweight rating. For deeper insights into Coterra’s valuation and financial health metrics, access the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, Coterra Energy has announced several strategic financial adjustments. UBS has reiterated its Buy rating with a price target of $30.00, citing Coterra’s active management approach and strategic capital allocation across its multi-basin operations. Meanwhile, Goldman Sachs downgraded the company’s stock from Buy to Neutral, setting a price target of $31.00, due to Coterra’s increased oil exposure following recent acquisitions in the Permian Basin. JPMorgan has maintained an Overweight rating but reduced its price target from $34.00 to $32.00, following a 4% decrease in fiscal year 2025 capital expenditure expectations. The company plans to reduce its Permian rig count, impacting capex by approximately $120 million, while modestly increasing activity in the Marcellus region. Piper Sandler also maintained an Overweight rating, emphasizing enhanced reinvestment opportunities due to recent acquisitions in the New Mexico Delaware Basin. JPMorgan noted that Coterra experienced operational challenges, particularly high water production in its Harkey Shale wells, prompting a pause in development. Despite these challenges, Coterra has maintained its fiscal year 2025 oil production guidance, with JPMorgan forecasting an increase in oil production in the latter half of 2025.
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